Oman consolidates electricity distribution and supply

Nama Group consolidates four companies into distribution and supply groups, covering whole country except Dhofar, seeking to revise cost structure and raise efficiency; preparing for privatization

Oman has completed the merger of the electricity distribution and supply companies of the Nama Group into two companies that have already commenced operations, the state-owned Oman News Agency (ONA) said.

Nama Group is the sole provider of electricity, water and wastewater services procurement, transmission, distribution and supply in the Gulf Sultanate.

In a report dated 6 June 2023, ONA said ‘Nama Electricity Distribution’ and ‘Nama Supply’ have replaced the following four companies: Muscat Electricity Distribution Company (MEDC), Majan Electricity Company (MJEC), Mazoon Electricity Company (MZEC) and Tanweer (Rural Areas Electricity Company).

The report said the new structure applies to the management and supply of electricity services in all governorates of Oman, except for Dhofar, where electricity, water and waste services are provided through Nama Dhofar Services Company.

Ahmed Amer Al Mahrezi, Acting CEO of Nama Group, affirming that the assets and employees of the abovementioned companies were distributed to the two new companies, said that the merger will help revise the costs of the electricity sector in the medium term, raise the efficiency of the electricity system, upgrade the standard of services and develop them to keep pace with technical developments in the field of subscriber services.

OIA, the shareholder of Nama Holding, which is the holding company of Nama Group subsidiaries, undertook to restructure the distribution and supply companies in December 2021 based on directives from the Ministry of Energy and Minerals and the Authority for Public Services Regulation (APSR) to enhance the efficiency of the electricity sector, reduce operational and administrative costs, and optimise subsidies.

The electricity subsidy for 2022, according to Nama’s latest annual report, stood at RO 525 million.

On 3 June 2023, OIA announced that the restructuring exercise had been completed, according to a report by The Times of Oman.

The ONA report said Nama Electricity Distribution, which consolidates all distribution activities, will specialise in low-voltage networks, including the construction of lines and transformers and meter-related operations. On the other hand, ‘Nama Supply’ will focus on billing and collection activities.

The report said the merger also unifies all services, including call centres, under ‘Nama Services’ to provide an integrated service window for all customers.

Completing the restructuring is expected to prepare the stage for the privatisation of the two companies in the near future. In October 2022, a report by Oman Daily Observer said the planned partial privatisation of MEDC was put on hold by the APSR following the initiation of the restructuring programme.

Energy & Utilities reported last year that TotalEnergies signed an agreement with water provider Veolia to start construction of a solar PV plant to power a Veolia-owned desalination plant in Oman. 

E&U also reported on a consortium of Acwa Power, US-based Air Products and local energy company OQ to develop a green hydrogen-based ammonia production facility in Oman.